Managing Investment Risk
Successful investing is not just about picking winners—it is about managing risk.
Diversification
Never put all your eggs in one basket. Spread investments across different sectors, asset classes, and geographies.
Position Sizing
Limit individual positions to a percentage of your total portfolio. A common rule is no more than 5% in any single stock.
Stop Losses
Define exit points before entering a trade. This removes emotion from selling decisions and limits downside.